It's the Australian price gouge that no-one is talking about, even more severe than Adobe's or the price of video games in Australia.
Autodesk: it has a near complete monopoly on the software developers use to design and build video games. Compared to the US, its digital products sell for almost double the cost here in Australia. 3D Studio Max, Maya — if you want to develop video games in Australia, and you want to do it via legal means, you must go through Autodesk. You have no real choice, and you must pay an exorbitant amount of money to do so.
The story begins with an anonymous email regarding the local pricing of Autodesk's products here in Australia.
"Is anyone looking into the price disparity of 3D Studio Max or Maya pricing," it began. "They're disproportionately priced but additionally they say it's illegal to use a version purchased in another territory in Australia - to the point of strong arming internationally owned developers whose parent companies make the purchases."
If you want to make video games, and you're serious about making video games for consoles, you cannot avoid using Autodesk products. It's next to impossible. Create an asset, render or character using a Nintendo devkit and it exports to a file that requires 3D Studio Max or Maya — both Autodesk products. The same goes for any major engine. If you're using Unreal or Source, you need to be using Autodesk software.
"It's a monopoly," explains Nic Watt, the Creative Director at Nnooo, and the only local developer willing to speak on the record about Autodesk's local pricing practices. "If we want to make games on any major platform, we have to use their software."
Once upon a time there was competition. 3D Studio Max or Maya — you were on one side or the other. But that all changed when Autodesk, started making a series of acquisitions. After the purchase of Softimage in 2008, Autodesk owned almost all of the 3D software solutions available to developers.
"It was only about four or five years ago that they went through a spree of buying them all," explains Nic. "Before there were competing companies. That kept everything healthy, but now it's all the same."
Take 3DS Studio Max, for example, it costs $3,675 if you purchase it in the US. The same product costs over $6000 in Australia. How is this justifiable?
Nic Watt describes the frustrating process of attempting to purchase Autodesk products during the making of its most recent release Spirit Hunters for the 3DS.
"I got in contact with Autodesk and they told me it was the resellers that set the price locally; that old get out clause," said Nic.
"There was a loophole that let me buy the product in the US, but then there was a big warning sign telling me that I wouldn't get a license basically. So we had to go through an Australian reseller."
Autodesk products are region locked, and this region locking is strict. If you buy a product from the US and register that software in Australia, you won't be able to use the software you purchased. If Australian developers want to buy the products they need to create games, they must go through the local resellers and pay thousands of dollars extra.
One developer, speaking on condition of anonymity, informed us that Autodesk once visited a large studio in Australia, giving them a dressing down for using US-licenses sent to them by their parent company in the US. 'Those licenses aren't legitimate,' they were told. 'You need to buy new ones'.
"Essentially what they've done is sit down in an office and said, 'how do we create a system that allows us to completely control prices around the world,'" claims Nic Watt. "You have to buy your serial number locally and they can tell by the number itself where you've bought the key from. They won't give you a license key if you've bought it outside of the country. As far as I'm concerned that's an unfair business practice. I can't go anywhere else."
————— We decided to try and get in contact with Autodesk in the US. After hours spent searching for a phone number to call, we were directed to an online customer service representative. This is the conversation that followed...
So, all pricing questions must go through the local Australian reseller. We called Digistor, one of two major Autodesk resellers in the Sydney area, to find out precisely why Australian developers were being asked to pay so much compared to their US counterparts.
"Good question," said a local sales representative. "We don't know. It's something we've raised with Autodesk quite often."
Despite the fact that Autodesk would not comment on Australian pricing, and would only provide contact details for local Australian resellers, Digistor was insistent that it was not in control of local pricing. The sold at higher prices in order to recoup a small margin based on the stock supplied to them by Autodesk.
"They sell to us at a cost and we make a margin on it," explained the representative, "but there's only so far we can discount it in Australia before it's not worth doing for us."
"There's a couple of legitimate reasons for the extra cost, one of them being that the cost of business in Australia is a lot higher. Plus there's less people and less money coming in, so the prices have to be a little higher. You'll find that across the board, Adobe, companies like that, all have a higher price for their Australian software."
We brought up the IT Pricing Inquiry, and the fact that Adobe was named as one of the worst offenders and have been summonsed to explain themselves.
"I saw that," said the representative. "They've had to bring down some of their pricing, so who knows what's going to happen on this side of things."
Clearly Digistor feels powerless to change the pricing of Autodesk products in Australia.
————- Speaking to the ACCC, it appears as though — for now — it is powerless to make any real changes with regards to Autodesk's price gouging. We were sent a simple statement, attributed to an 'ACCC spokesperson which stated the following:
Businesses are free to set their own prices as long as they do so independent of their competitors and in a way that does not mislead or deceive consumers.
This applies despite the region locking, despite the fact there are no real alternatives for developers in this country if they want to make 3D games for modern consoles.
"It affects our competition in the world marketplace," explained Nic Watt. All other calls to other developers remain either unanswered, or they declined to comment.
"While a couple of grand on a project that costs five million isn't a big deal it does add up — if you have 10 or 20 artists that's a lot of money.
"It has a massive affect on us. You have to imagine some people are saying, 'I can get a torrent of this for free'. I'd quite happily pay American prices, but when you want to double the price just because I live in Sydney, it's hard to care about being loyal to that company. I want to be legitimate, but when you're doing that, you're asking people not to respect you.
"But if they can sell software for almost double the price in Australia and get away with it, why wouldn't they do it? There's no incentive for them to stop unless the government steps in."